Purpose of Audit

The purpose of our audit was to review the Sullivan County Industrial Development Agency (SCIDA) Payment in Lieu of Taxes (PILOT) Program for the period January 1, 2012, to April 10, 2013.

Background

The overall goal of IDAs is to advance the job opportunities, health, general prosperity, and economic welfare of the people of the State. The SCIDA was established in 1970 and is governed by a Board comprising nine members appointed by the Sullivan County Legislature. The SCIDA extended benefits totaling approximately $7.1 million for 58 projects during our audit period.

Key Findings

• The Sullivan County IDA (SCIDA) has established a Uniform Tax Exempt Policy for both general and specific-purpose projects. The policies are specific and clearly articulate project goals and abatement schedules. The project approval process includes in-depth cost-benefit analyses based on reasonable assumptions. However, there is no effective mechanism in place to identify agency members’ financial interests in potential projects during the selection process. SCIDA officials submit a financial disclosure form to the County Clerk of the Legislature, detailing any business interests; however, the County does not unseal and review the financial disclosure forms or provide them to the SCIDA for review. One of the projects in our review was approved for a PILOT agreement even though a SCIDA Board member was the spouse of one of the two partners in the potential project.
• Projects are monitored and performance goals are tracked. PILOT amounts are adjusted annually based on performance.

Key Recommendation

• Improve the current process for identifying SCIDA officials’ potential financial interests in projects seeking SCIDA assistance.